Quantifying the costs of climate change on local government assets

TitleQuantifying the costs of climate change on local government assets
Publication TypeReport
Year of Publication2012
AuthorsBalston, JM, Kellett, J, Wells, G, Li, S, Gray, A, Iankov, I
Date Published11/2012
InstitutionNational Climate Change Adaptation Research Facility
CityGold Coast
ISBN Number978-1-921609-61-9
Keywordscase study, comparison, decision-support-tool, financial impacts, modelling, roads, S&I, SA, Settlements and Infrastructure, simulation, South Australia, Tas, Tasmania, Vic, Victoria, WA, Western Australia

This final report addresses development of tools that allow Local Governments to translate climate change impacts on assets into strategic and operational financial and asset management plans. This reserach was funded through the Australian Research Grants Program (ARGP).

Australia’s 560 Councils are responsible for the management of a range of assets valued at approximately $212 billion, many of which have a life span greater than 50 years and so will be affected by climate change. 

Currently, maintenance and replacement of hard infrastructure by Local Government is guided by the principles, models and tools provided in the International Infrastructure Management Manual (IIMM), developed by the Institute of Public Works and Engineering Australia (IPWEA) in conjunction with Councils, engineers and manufacturers of various components and materials. Currently these tools do not allow for the incorporation of climate change impacts or calculate the likely flow-on effects to asset and financial management and so Councils are limited in their capacity to estimate these changes.

On the basis of an extensive literature review and rigorous methodology developed in collaboration with the Local Government Association (LGA) South Australia (SA), IPWEA, University of South Australia (UniSA), Bureau of Meteorology (BOM), Coast Protection Board of South Australia, Municipal Association Victoria (MAV), Western Australian LGA (WALGA), and ten collaborating Councils, this National Climate Change Adaptation Research Facility (NCCARF) Settlements and Infrastructure funded research project has developed a financial simulation model and supporting decision tools to provide a clear, comparative analysis of the financial impacts of climate change on three major asset classes of importance to Australian Local Government – sealed roads (hotmix and spray sealed) and unsealed roads.

The integrated financial modelling includes options pricing and uncertainty analysis to deal with the highly variable nature of data inputs that describe the not-static components of climate change scenarios and impacts on the useful life of roads, and economic and price fluctuations. The model will provide Local Government with the capacity to regularly update the cost analysis and outputs have been designed to interface with the existing tools developed to support the International Infrastructure Management Manual (IIMM) to create a simple user friendly front-end that can be used by Local Government.